Sydney’s Vic on the Park on the market
Following the recent sale of Newtown’s Marlborough Hotel to Bruce Solomon and Matt Moran’s Solotel, owners Australian Pub Fund (APF) have decided to sell another of its large format inner western Sydney freehold hotel, Vic on the Park in Marrickville. The 1247sqm, multi-storey hotel on Addison Rd is a landmark in the area, and has been a favoured meeting place for residents and visitors to Sydney’s Inner West for several decades. “In terms of Sydney’s surging Inner West, a revenue producing commercial property holding situated upon in excess of 1200sqm is both rare and attractive,” said Ray White Asia Pacific Director Andrew Jolliffe. “Stapled to the underwritten nature of the commercial property value, is the investor magnetism proffered by the hotel’s unmistakably robust cash flow, which has been a key component of the business’ complexion for many, many years.”
Speaking on behalf of the vendor APF, Director Matthew Beach confirmed the continuation of the fund’s plan to recycle equity via exiting strategic hotel investments. “We are by nature and in practice, a private equity fund; and as such it is incumbent upon us as the fund’s custodians to manage assets in and out of our property portfolios when appropriate. We did this successfully at the beginning of the year with the Marlborough, Kinselas and Toxteth Hotel in Newtown, Surry Hills and Glebe respectively, and similarly, we are now planning to do the same with the Vic on the Park,” Mr Beach said. “The Vic on the Park Hotel operates as an important member of the broader inner west community,” APF CEO Andrew Gibbs said. “And in doing so, the hotel and its business model has periodically morphed to accommodate the needs of the surrounding area. The size of the property and the diverse revenue streams will continue to make the Vic a very good business for both patrons and its future owners.” The arrival into the marketplace of the Vic on the Park comes at a time when east coast hospitality transactions remain fluent, few more evident than the Justin Hemmes’ led Merivale Group’s acquisition of The Collaroy earlier this month for $21,000,000.00.
Director of CBRE Hotels Daniel Dragicevich believes the appetite for A-grade freehold hotels, particularly in mature Sydney suburbs such as Marrickville, continues to enjoy considerable depth. “We’ve seen some significant sales transpire this calendar year in both Sydney and Brisbane, and the long term fundamentals remain positive for irreplaceable properties such as the Vic on the Park,” Mr Dragicevich said. “As an area, Sydney’s inner west has enjoyed the benefit of property value augmentation over the past decade, and will now begin to see the benefit of considerable State Government funded investment into proximate infrastructure projects. This all points to very meaningful long term prospects from both a land and business value perspective; and means the Vic on the Park is strategically well placed to be able to take advantage of the very clear growth prospects for Marrickville and its surrounding suburbs.
“The Vic on the Park has become an inner west institution, and we expect very strong buyer interest for its truly compelling fundamentals” commented Dragecivich. “The venue already exhibits very large and well balanced cash flows,” he said. “When analysed, these revenue centres are in line with the likely demand drivers for occupants of the Victoria Road Precinct mixed use masterplan (including potentially 1100 new residential dwellings) which surrounds the site; with the future earnings trajectory of the asset supported as a direct consequence,” Mr Jolliffe said. Post the proposed sale of the Vic on the Park hotel, the Australian Pub Fund will own and operate three freehold hotels; including Balmain’s Unity Hall, and Brisbane’s The Elephant and Exchange hotels.
The Vic on the Park will be sold by Ray White and CBRE via an international expressions of interest campaign closing September 28, 2017